Monday, November 4, 2013

What must change is our attitude to futurity – I am committed to the idea that the firm must emerge stronger --break--, not merely surviving, but thriving. I am also committed to the idea that the firm must achieve its rightful place in the world. To do this we will have to make wise choices in the difficult months ahead, but choices I am convinced we will make, in the right direction – towards longitudinal sustenance against the vision of a genuinely enduring institution.

--break--

At recent meetings throughout
the partnership and firm, I have spoken to many of you about the notion of longitudinal
sustenance – the idea that we must stay with our essential purpose,
particularly during hard times, in order to become a truly enduring institution
and one that has the quality, integrity and indeed, scale, to genuinely be
counted at the top of the profession. This note seeks to lay out these
ideas to all of you, so we may decisively confront the next year’s challenges,
but also be firm of purpose in seizing our destiny.

As a firm, we have an overall
vision and set of aspirations that include the following key elements:

Our
aim, first and foremost, is to be a high quality, values driven
institution at the top of the profession

Our
purpose is to serve the senior agenda of the world’s leading institutions

We are
a universal, global consulting firm, implying that in principle we serve
the range of issues on the senior agenda across all industries in most
geographies

Our
core doctrine is that of –break--

To
achieve this ambition, a key competitive advantage is our structure as a
cohesive, global private partnership

This
vision has implications for how we manage and grow the business over the medium
and longer term, and how we confront challenges over the course of the next
fiscal year given the economic downturn. We must maintain or grow the
business in a substantive way and sustain or build momentum around investments
across multiple years, and make the appropriate tradeoffs.

As we structure our plan for –break--,
we are ensuring this principle of longitudinal sustenance governs our
thinking. Our intent is to:

Protect
and hold together senior talent, so that the core revenue engine of the
firm is sustained through the downturn

Retain
and develop key talent at all levels of our business while in parallel
recognizing the need to manage staff capacity appropriately, with an eye
towards ensuring we have the right capabilities and resources to rebound
when growth returns, including looking for creative ways to
variabilize staff costs to allow us to carry more individuals, but fewer
FTEs (e.g., enhancing our leave of absence programs)

Hold
reserves for investments in –break--, so that firm strategic priorities --
break-- can be funded

Supporting this ambitious
agenda requires that we make hard choices between near term compensation and
funding longer term institution building initiatives that will propel future
earnings. However, I am confident in our business and the returns these
strategic investments will provide.

Near
term, we are likely to see continued contraction in the consulting
market. In the face of such conditions we must manage the business and
our cost base in a prudent fashion. To this end, management is
implementing a set of actions across the board to address the firm’s
controllable costs. Enhancements to our sabbatical, leave of absence and
secondment programs will provide staff with new options and create greater
flexibility in how we deploy. Where possible, we will redeploy
client-facing staff to meet demands in growing markets, and where appropriate and
in geographies where it is necessary, we will re-shape our capacity to meet
market demand.

In parallel, the regional
leadership teams have announced new policies for controlling discretionary
spend. We will significantly reduce or eliminate expenditures on meetings
and internal travel, including –break--. In addition, we must make
explicit cost/service trade-offs on necessary versus discretionary support
provided to the business – for example, making offices the primary venue for
training.

While these steps are not
without consequences, the benefits provided by taking such actions now allow us
to maintain the critical mass and shape of the business that will position the firm
for growth and to come out of the downturn stronger. Each of you has a
responsibility, as well, to make the right choices in managing discretionary
spending and promoting a general mentality of austerity for the firm.

At the same time, we are
increasing discipline in our processes that drive top line revenue. It is
now more important than ever that we stand by our clients, supporting them in
formulating their agendas in the face of challenges created by current economic
conditions. We have launched a focused campaign effort on --break-- which has resulted in --break--. This effort is generating real traction in the market and
creating new opportunities, while at the same time building capabilities in our
marketing and sales processes to do this on a repeatable basis.
Further, I have asked --break-- to take strong form
ownership of our biggest commercial opportunities, and review the selling teams
for –break-- to ensure we are leveraging firmwide capabilities to maximize our
potential for success. On the back end, we are working with --break-- to meet
receivables performance targets. Our commitment to the foresight agenda
will ensure the relevance our message to our clients, differentiate us in the
marketplace and help drive commercial success.

In all likelihood, the coming
year will be extraordinarily challenging for our clients, and by implication,
for us. Nevertheless, we have seen through challenging times before and
have come through a historic challenge in –break--. What must change is
our attitude to futurity – I am committed to the idea that the firm must emerge
stronger --break--, not merely surviving, but
thriving. I am also committed to the idea that the firm must achieve its
rightful place in the world. To do this we will have to make wise choices
in the difficult months ahead, but choices I am convinced we will make, in the
right direction – towards longitudinal sustenance against the vision of a
genuinely enduring institution.